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EMEA Oil Update: Brent Breaches $90/bbl Again as US-Iran War Restricts Energy Flow

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Brent crude futures surged above $90 per barrel on Monday as the collapse of US-Iran peace talks triggered a near-total cessation of shipping through the Strait of Hormuz.

The Brent future contracts rose over 3% to $90.80 per barrel, while gaining nearly 16% on a weekly basis in the week ended July 17. Murban future closed at $81.32/bbl on July 17 and was not trading by the time of publication of this oil price update.

This surge follows a weekend of intense military escalation between the US and Iran, which has resulted in a closure of the Strait of Hormuz.

According to LSEG data, maritime activity in the vital waterway has plummeted, with only two outbound tankers recorded and zero inbound traffic, effectively reverting flow levels to those seen prior to the now-defunct Memorandum of Understanding, ING analysts noted.

With attacks spreading to Kuwaiti infrastructure and Caspian pipeline terminals, markets face a critical supply shock.

Reports indicate that Iran has directed Houthi proxies in Yemen to prepare for a closure of the Bab el-Mandeb Strait should the US target Iranian power infrastructure.

Such a move would severely disrupt Saudi Arabian exports, forcing tankers to take longer, more expensive routes, analysts said.

With US Strategic Petroleum Reserve releases scheduled to cease by the end of July, the market is becoming increasingly vulnerable, ING added.

Analysts warn that without a rapid de-escalation, the region risks a return to large-scale, sustained attacks on energy infrastructure, leaving global oil supply chains in an extremely precarious position.

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